EXCPR™: PREMIER MARKET INDEX ANALYSIS

PREMIER MARKET INDEX ANALYSIS - BOURSA KUWAIT

BEST BUYING AND SELLING TIMES

Indicators are key tools used to understand performance, measure business in particular, and markets in general. Financial markets, like other institutions, also rely on identifying some general indicators that will understand market performance, whether in an upward, horizontal- fluctuating, or downward trend. EXCPR Consultancy and Business Management CO. analyzes the performance of the Boursa Kuwait for the last three years, through which it aims to recognize shareholders and stakeholders on the direction of local capital markets and the movement of volatility in it. EXCPR CO. founder and MD Eng. Nayef A. Bastaki further points out that the other objective of this work is to understand the behavior of the local market and determine the best times to buy, retain, or even sell shares. As is well known, the basis for investment is to buy shares at the lowest prices and sell them at the highest level, thus achieving the highest amount of the expected profit margin. According to the report of EXCPR CO., the growth volume in the premier market index of Boursa Kuwait was about 41.4% in three years. During that period, the index rose from 4,905 points in June 2018 to 6,936 at the end of June 2021. As is well known, the premier market Index of Boursa Kuwait is one of the most important indicators of the domestic market, and the engine of the rest of the other market indicators - the BK main 50 and the main market , which includes many shares of leading and market-driven companies, which are the generator of the activity of other companies in the local market.

QUARTERLY PERFORMANCE

As is well known, the market is moving in three directions, the first is the upward trend, the second is stability - horizontal, and the third is the downward trend. These changes in direction reflect several factors, including corporate performance, financial factors and inflation, the domestic political situation, as well as dominant external forces, and other influences that may mislead market indices and shareholder confidence. EXCPR CO. has analyzed Kuwait’s premier market performance index over the past three years. The results indicate that the second quarter of the year is considered the most important quarter in terms of market volume growth, which historical results indicate a significant recovery in that period and a growth rate of the premier market index of about 4.4%. The positive situation prevailing over the second quarter of the year may have been due to the establishment of general assemblies of most listed companies, or the announcement of corporate distributions, resulting in an increase in the procurement process and thus a rise in the general index. On the other hand, historical results indicate a 5.3% decline in the first quarter of the year, usually due to profit-taking after indexes rose to record highs. The following table shows the magnitude of the change in the time periods of the premier market Index on the Boursa Kuwait over the past three years - in percentage terms:

	FIRST QUARTER	SECOND QUARTER	THIRD QUARTER	FOURTH QUARTER
2018	-	2.64	1.64	0.63
2019	10.25	5.45	-8.44	12.32
2020	-26.40	4.68	11.18	0.89
2021	0.26	4.72	-	-
AVG.	-5.28	4.37	1.46	4.61

As noted in the previous table, the overall situation in control of the second quarter - April/May/June - is an upward general trend, the premier market index is influenced by the desire of more investors to buy shares and obtain the desired distributions after the general assemblies. Perhaps the stability of the third quarter of previous years - if the 2020 results are excluded during the CORONA period — is the relative stability that dominates domestic securities trading, due to the entry of the summer season and travel abroad, thereby reducing the period of trading on shares. The results of EXCPR CO.'s research indicate that fourth-quarter performance is usually on the upward trend, clearly offsetting third-quarter performance. Returning to market performance in the first quarter of the year, shareholder-dominated behavior is selling, making some gains and making more profits, especially since stock prices have reached indicators that promise good profits – so-called speculative behavior. The following figure shows the performance of the premier market index on the Boursa Kuwait from 2018 to 2021:

MONTHLY PERFORMANCE

To more accurately analyze previous results, the premier market index was sorted in each month of the year to determine the extent to which the investor's behavior corresponded during the year, and the extent to which they had a mathematical relationship. As shown in the following table, the positive change rate in the premier market index peaked in June and July at 3.0% and 3.4%, respectively. These results demonstrate the positive behavior of investors and the remarkable procurement process experienced during that time period of the year. The results also show continued positive growth in other periods of the year, such as January and April, which were at a rate of 2.8% and 2.9%, respectively. The same table also shows the decline in the premier market index in February and March of the year by 2.4% and 3.2%, respectively. This can be analysed by the selling strategy on which some shareholders depend, especially after the significant growth of the stock during the year and thus reaping more profits related to the rise in the share price.

	CHANGE IN PREMIER MARKET INDEX -%
Jan.	2.81
Feb.	-2.37
March	-3.24
April	2.92
May	1.87
June	3.03
July	3.44
Aug.	2.56
Sep.	-0.15
Oct.	-0.82
Nov.	2.21
Dec.	2.29

The following figure also shows the change in the premier market index from 2018 to 2021 for the months of the year. Overall, Boursa Kuwait's premier market index grows by 2.0% if the 2020 results - the Covid-19 period - are excluded.

Finally, Bastaki says that the previous analysis is not an explicit call to buy or sell shares, but rather key indicators that have been drawn from the market performance in Kuwait in previous years. As the results indicate, the top of the market index is usually in the middle and end of each year, which shows an increase in shareholder stake and the pursuit of distributions approved by general corporate associations. On the other hand, the start-of-year period is usually the bottom curve indicator, which shows the volume of selling by some speculators in the domestic market, towards taking some of the profits from higher corporate share prices. The relative stability of the market index is usually the third quarter of the year, in which there is a tie between buying and selling shares. On the one hand, knowing such market behaviors and performance indicators will guide investors and shareholders to choose the right times to buy shares at the best prices, get rid of them at the levels of constituent peaks, thereby achieving the strategy of amplifying the desired profits.